Tandem Diabetes (NASDAQ:TNDM), which now markets the popular t:slim Insulin Pump for people with Type 1 diabetes and has two new pumps awaiting FDA clearance, has taken a unique consumer-focused approach to the design of its products.
Kim Blickenstaff
“When we started the company, we had to figure out why only 27% of people with Type 1 diabetes wore an insulin pump,” Kim Blickenstaff, president and CEO, says in an interview with BioTuesdays.com.
“After years of research, including thousands of in-depth interviews with people with diabetes and health care providers, we discovered that existing pumps had a level of complexity that limited the number of people willing to consider pump therapy,” he adds. “Plus, they were bulky and antiquated looking.”
Mr. Blickenstaff explains that Tandem’s solution was a pump designed with modern consumers in mind. Using a next-generation pumping mechanism that allowed for miniaturization and mitigated safety risks, the t:slim pump has a compact contemporary style, with a touch screen interface and rechargeable battery.
“It has the look and feel of a consumer device and is as easy to learn and use as a smartphone,” Mr. Blickenstaff contends. The technology also facilitated development of a portfolio of products around the t:slim platform, including two new pumps—the t:slim G4 and t:flex.
A survey conducted in the second quarter this year by Close Concerns’ market research company, dQ&A, found the t:slim to be first in overall satisfaction, ease of training, product features, customer support and consumer software. The device costs approximately $4,500 and is reimbursed by third party insurers.
Earlier this month, Tandem reported that sales in the third quarter grew 74% to $13.5-million from $7.8-million a year ago. In addition, pump shipments grew 59% to 2,935. Tandem also updated its sales guidance for all of 2014 to be in the range of $48-million and $50-million.
The company, which began marketing t:slim in late 2012, had shipped about 14,400 t:slim pumps as of Sept. 30, 2014. Sales were divided equally between patients converting from other pumps and new adopters.
t:slim Pump Has A Compact Contemporary Style
In the first quarter this year, Tandem expanded its U.S. sales coverage to 60 territories, with each territory consisting of one sales rep and one certified diabetes educator.
The company said that in the third quarter, operating expenses climbed to $23.4-million from $14.7-million a year earlier, reflecting the expansion of commercial operations and non-cash, stock-based compensation.
Tandem recently submitted a 510(k) application for FDA approval of its t:flex pump for people with greater insulin needs, such as those with Type 2 diabetes. The highlight of the t:flex is a 480-unit cartridge, which will offer the largest insulin pump reservoir available, according to Mr. Blickenstaff.
“Two-thirds of endocrinologists cite limited volume capacity as the Number 1 barrier to pump adoption for people with Type 2 diabetes,” he adds. Insulin pumps normally hold up to 300 units of insulin.
According to Mr. Blickenstaff, there are some 20 million people in the U.S. with Type 2 diabetes, of which about 4.5 million use insulin and about 1.2 million use daily, rapid-acting insulin and may be candidates for pump therapy. Of those, only about 75,000 people are wearing pumps now, “so we have a significant market expansion opportunity with the t:flex,” he adds.
Tandem’s second pipeline product is the t:slim G4 insulin pump, which integrates its t:slim technology with the Dexcom G4 Platinum CGM System, a continuous glucose monitor.
In July, Tandem submitted a premarket approval application to the FDA for the t:slim G4 insulin pump. The company expects the FDA review cycle to take 12-to-18 months.
“These are incredibly important milestones as we work to expand our product portfolio to meet the various needs of the diabetes community,” Mr. Blickenstaff says.
Analyst Ben Haynor of Feltl & Co., in an initiation report in September, wrote that Tandem has done a solid job in converting multiple daily injection (MDI) patients to the t:slim pump.
He estimates that only Tandem and Insulet (NASDAQ:PODD) are seeing half or more of their patients move from MDI to an insulin pump. He writes, “…the companies appear to be the driving forces behind insulin pump market expansion.”
He started Tandem at a “strong buy” rating, with a price target of $19. The stock closed at $14.97 on Friday.
Mr. Haynor figures Tandem’s t:flex pump, if approved, could expand the rapid-acting-insulin-dependent Type 2 market by three-to-six times. Its current penetration is 4% to 8%.
He also said the t:slim G4 continuous glucose monitor and insulin pump will enable Tandem to take market share from other combination devices, including Medtronic’s 530G and Animas’ Vibe, which is awaiting FDA clearance, and expand the pump market.
